Savvy Consumer: Ask Elisabeth

Question: I keep getting these "pre-approved" offers by mail from credit card companies. They have run my credit report, or so they say. When these companies do these small credit checks, does it affect my credit score? If so what can be done about them just randomly going in and doing a credit check? -- S.C. Liberty, Mo.

Answer: This is a common misunderstanding. Don't worry. When companies run your report at random to see if they'd like to offer you credit, it does NOT hurt your credit score. Nor does it hurt to order your own credit report as often as you like. What DOES hurt your score is if you APPLY for lots of credit and therefore many companies check your report at your request. Bankers get suspicious if you apply for gobs of credit all at once and that lowers your score. Even though unsolicited credit checks do not harm you, if you do not want to receive endless credit card offers in the mail, tell the credit bureaus you want to opt out. You can do this by calling (888)567-8688. You can opt out for a few years or forever!

Question: Almost seven years ago I joined a gym. About two weeks later, I canceled the membership after one visit. It was never billed to my credit card again, yet about three years later I started getting letters from collection agencies. I get calls in addition to regular letters from the agency offering me "deals" to pay $800 on a canceled account! Any suggestions to dispute this?

-- C.D. Torrance, Calif.

Answer: You join a gym to exercise your body, but if you want to quit, you may find it hard to exercise your rights! Some states now require gyms to offer people the option of a brief introductory membership -- typically 90 days. But, remember, if you signed a long term contract, you may have no recourse. When you're trying to get buns of steel, often those contracts are iron-clad.

So the first step is to figure out whether you had a right to cancel your contract. This will be governed by the "future services" laws in your county or state. Call your county or state consumer protection office for guidance. If you find that you DID have a right to cancel, then order your credit report from all three major credit reporting agencies. If the gym membership shows up on there as an open account, fill out the simple paperwork to dispute errors on your credit record. By law, the credit bureau then has 30 days to research your dispute and remove the debt.

If collectors continue to call, ask them for written proof of the debt. If you were within your rights when you canceled, they won't be able to provide it. And even if you didn't have a right to cancel, all you have to do to get a collector to stop calling you is ask for its company name and address, then write a certified letter asking it to stop calling. By law, it must obey.

Question: I had to file for Chapter 7 bankruptcy back in March of 1999, due to a serious injury and had no means to pay all of my bills. How long does that stay on my credit report? I was just turned down for a credit card due to that. I am never late paying for anything and I am a homeowner with my husband. I recently checked my score and it was 692. What should I do?

-- L., New York

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